VSTY restructures and eliminates $4.1 to $4.7 million in annual expenses. The company will take a $900,000 earnings hit.
Varsity Group Inc. Announces Cost Reductions
Wednesday December 13, 4:10 pm ET
WASHINGTON, DC--(MARKET WIRE)--Dec 13, 2006 -- Varsity Group Inc. (NASDAQ:VSTY - News) today announced a cost reduction program geared to reduce its cost structure and focus on its core businesses. "While Varsity Group will continue to invest in and support our customers' needs, we believe it is in the best interests of our customers and shareholders to focus our energy on supporting and growing our core book and uniform businesses and remove costs not directly related to them," said Jim Craig, Interim CEO and President. The Company reduced its headcount, which included closing its IQ Digital unit, and also reduced its remaining financial commitment on its outsourcing agreement with SchoolOne by approximately 40%. Estimated full year 2007 cash overhead savings associated with these cost reduction measures, including the elimination of related spending on consultants and expenses, will range from $4.1 million to $4.7 million.
Costs associated with these expense reductions include a one time, non-cash goodwill write-off of approximately $0.7 million against fourth quarter earnings related to the closure of IQ Digital. Severance costs related to the headcount reduction approximate $0.2 million.
<snip>
biz.yahoo.com |
